Crude oil supply growth to outpace rise in consumption in 2018 - IEA

Fesharaki, an expert in the energy market and an academic warned that the world may witness a drastic fall in price of a barrel of Oil to $30 if the OPEC failed to cut production.

Late last month, OPEC said that it would extend an 1.8 million-barrel-a-day (B/D) cut to oil output by nine months through March 2018, but Fesharaki believes that this is not enough to stabilize prices. That led to a downturn in crude oil prices as many market watchers were anticipating deeper cuts. The Standard & Poors Energy Sector Index showed a 2.1 drop, overall, with shares of Exxon Mobil falling by 1.4 percent, to hit $81.83; Chevron also fell by almost 2 percent, to hit $106.18.

That's because some OPEC members, including Nigeria and Libya, have been exempt from cutting and their rising output is seen undermining efforts led by Saudi Arabia.

On the New York Mercantile Exchange, crude futures for July delivery fell 0.97% to $46.01 a barrel, while on London's Intercontinental Exchange, Brent eased 0.84% to $48.31 a barrel.

Oil prices dropped to six-week lows on Thursday, under pressure from high global inventories and doubts about OPEC's ability to implement agreed production cuts. Data from the U.S. Energy Information Administration (EIA) this week showing growing gasoline stocks and shaky demand, despite the peak summer driving season, sent prices tumbling.

But those efforts have been blunted by a massive boom in production by US shale operators, who have become much more efficient. This is according to new data from the Energy Information Administration, who said that USA crude stocks, in particular, fell by a far lower amount than they expected. Accordingly, higher shale oil supplies will weigh on prices. In addition to that, the production from OPEC, in the month of May rose by 336,000 barrels per day, thanks to Libya and Nigeria.

Looking at anticipated growth in global oil demand this year, OPEC reiterated its forecast of 1.27 million barrels per day (bpd).

Oil headed for the longest run of weekly losses since August 2015 as OPEC member Libya restored production just as the surplus in the US showed few signs of abating.

Some traders still hope that Wednesday's readings from the USA government will show declining inventories for oil and gasoline, as numbers from the Energy Information Administration don't always match those from the API.